Is innovation destroying jobs? Firm-level evidence from the EU

Mariacristina Piva & Marco Vivarelli

#2017-013

Using a unique firm-level database comprising the top European R&D investors over the period 2002-2013 and running LSDVC estimates, this study finds a significant labour-friendly impact of R&D expenditures. However, this positive employment effect appears limited in magnitude and entirely due to the medium-and high-tech sectors, while no effect can be detected in the low-tech industries. From a policy point of view, this outcome is supporting the EU2020 strategy, but - taking into account that most European economies are specialised in low-tech activities - is also worrying in terms of future perspectives of the European labour market.

Keywords: R&D, innovation, employment, firm-level analysis, EU

JEL Classification: O33